BPU approves deferred accounting and customer credits after GRT error; Middlesex pact raises revenue but phases refunds
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Summary
The board approved staff recommendations for deferred accounting and refunds after a gross-receipts-tax error and adopted a settlement that increases joint petitioners' revenue requirement while providing customer bill credits and specified quarterly bill impacts for Middlesex and Pinelands customers.
The Board of Public Utilities on Feb. 18 approved a series of water-utility actions tied to a gross receipts tax (GRT) error and related rate proceedings.
Staff told the board that in August 2024 the division of taxation discovered an error that caused the GRT to be charged at an incorrect rate; in March 2025 the board directed affected utilities to defer the effects on books and records. Aqua New Jersey filed a petition on June 2, 2025, seeking approval of deferred accounting treatment of the GRT and a method to refund customers in its next base rate case; staff recommended approving a stipulation authorizing deferred accounting and a refund mechanism, and the board adopted staff's recommendation.
In a similar proceeding, Middlesex Water Company proposed a one-time estimated bill credit of $26.52 tied to the GRT adjustment; the board approved that credit on staff recommendation.
In a related joint proceeding (Middlesex Water, Pinelands Water Company and Pinelands Waste Water Company) filed June 30, 2025, parties agreed to a stipulation that staff said results in an overall revenue requirement increase of $14,500,000 and a return on equity of 9.6%. Staff presented estimated quarterly bill impacts: an average Middlesex residential customer would see a quarterly bill increase of $21.92; the average Pinelands water customer would see a quarterly increase of $20.51; a Pinelands wastewater customer would see a quarterly increase of $67.49. Middlesex customers will also receive a quarterly bill credit of $5.64 for four billing periods. Staff recommended adoption of the stipulation and the board adopted the initial decision and directed joint petitioners to file revised tariffs.
Commissioners discussed the need for customer education and noted that water is a unique utility users ingest; they also raised ongoing PFAS-related compliance and investment needs as reasons for robust consumer communication.
What happens next: The joint petitioners were directed to file revised tariffs by Feb. 19, 2026, and customer refunds and credits will be implemented as described in the approved stipulations and orders.
